Special Needs Planning

The cost of care for a disabled child or other loved one can be stressful, especially when families think about planning for the future. Parents and relatives with good intentions try to provide for special needs family members through an inheritance; however, if not left properly, an inheritance can disrupt crucial benefits.

Proper planning and the use of special needs trusts allow families to provide financial stability for their special needs loved ones, but avoid a disruption in benefits and programs that those loved ones rely on.

Parents, Legal Guardians, and family can create what are known as Third Party Special Needs Trusts on behalf of the loved one with special needs. This type of trust can be funded by the creator either during their lifetime, or through their estate plan at death.  The trust is designed to be used for any needs that a beneficiary might have that public benefits do not provide for including:

  • Therapy
  • Work or Life Skills Training
  • Care
  • Entertainment
  • Home Renovations
  • Transportation
  • Furniture

Additionally, it allows the beneficiary to retain their benefits, including Medi-Cal and Supplemental Security Income (SSI).

When a special needs beneficiary comes into money, it can disrupt his or her public benefits. This can happen if they win a court settlement, or come into an inheritance directly.  In order to avoid losing benefits, a beneficiary, may be able to create his or her own special needs trust or a parent, gradparent or court may do so on the beneficiary’s behalf.  This is referred to as a First Party Special Needs.  Although it allows a disabled person to be able to keep his or her benefits, if there is any money remaining in this type of trust upon death, then it must be paid back to the government for services it provided.  This can be avoided with proper planning, or in the case of an inheritance through a living trust, a skilled attorney may be able to fix the trust.

At Bryant Elder Law in Santa Ana, California, we help clients with special needs planning and management.

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